Among the EU28, Hungary recorded the second largest drop in the general government debt-to-GDP ratio last year. According to Eurostat data, the 77.6 percent general government debt-to-GDP ratio is 4.7 percent lower in comparison to first quarter data from 2014. Thus, the Hungarian figure has been far below the EU average.

The good ranking has been the result of above-average Hungarian economic growth. In Q1 2015, Hungary’s GDP grew by 3.5 percent year-on-year. The favourable growth figure is attributable to modest inflation, the Government’s forex borrower rescue scheme, higher wages in real terms and the improving employment situation. The Government’s prudent fiscal policy has been another factor behind the drop in the general government debt-to-GDP ratio.

The only country with a larger decrease was Greece, where the ratio is still almost 100 percentage points higher than in Hungary even now: it is close to 170 percent.

Outstanding growth data, the massive current account surplus, steadily low fiscal deficits and diminishing general government debt are signs of a sound economy. Accordingly, it is justified that the Government is expecting credit rating agencies to restore the country’s investment grade status in the near future.

(Ministry for National Economy)